(Oregonian (Portland, OR) Via Acquire Media NewsEdge) March 04--Comcast Corp. plans to continue offering low-cost Internet service indefinitely to families who have kids on free or reduced-cost school lunch programs.
The "Internet Essentials" program began in the fall of 2011, part of a deal Comcast struck to win federal approval for its purchase of NBC-Universal. Comcast initially agreed to provide the service for three years, but said Tuesday that it will continue the program when the three-year commitment expires this fall.
The company's decision to extend the program comes as it seeks regulatory approval for another big acquisition, the pending $45 billion purchase of Time Warner Cable.
Comcast's low-income program offers 5 megabit-per-second downloads for $9.95 a month. A comparable service costs around $50 a month to subscribers paying full price -- though most subscribers pay less than that because of bundled service packages, introductory discounts or discounts offered to customers who renew their service for a set period of time.
Internet Essentials also offers a basic computer to program participants for $150.
To qualify, a family of four needs an annual income at or below $43,568. The program is also available for families of parochial, private, cyberschool and homeschooled students.
Comcast says 300,000 families have signed up for the program since its launch, including more than 8,500 in Oregon and Southwest Washington.
While Comcast has never detailed the economics of the program, costs to the company are likely small. It's even possible the program boosts Comcast's profitability, albeit marginally, by bringing on subscribers who wouldn't otherwise be able to afford Internet service.
If Comcast has extra bandwidth on its network, the cost of adding a few thousand customers in each market, at a relatively low speed (Comcast's standard downloads run up to 25 megabits per second), would add little to the overall operating expense.
-- Mike Rogoway; twitter: @rogoway
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